Climate Change and Companies

Climate change and the transition to a net-zero future could create new industries and new growth opportunities for businesses, which could revitalize economies.

But there’s a downside, there are an estimated 1.8 billion people, or 23 percent of the global population, directly exposed to flood depths greater than 0.15 meters in a 1-in-100-year flood event. At the same time by 2030, 700 million people will be at risk of being displaced as a result of droughts.

For companies thinking about the ways the changing climate might affect their business, weather and climate-related events cost the global economy $313 billion in 2022 – with only $132 billion of these losses covered by insurance.

The transitional risk comes from the potentially higher business costs from new policies, laws and other regulations designed to address climate change. Transitional risks can also arise from changes in technologies and consumer trends, which may also lead to reputational risk as society changes its view on ethical business practices. If sectors move away from activities that contribute to climate change, they risk being left with stranded assets – a piece of land, property or equipment whose value has deteriorated.

The energy industry is one sector particularly open to transitional risk. With the push for green energy– and energy security – governments are increasingly shifting to a reliance on renewable energy sources and demanding net-zero carbon emissions from energy producers.

However, the implications are profound. It is a loud, clear message resonating across the nation, declaring a commitment to a sustainable future that taps into the power of nature without adversely impacting it. The journey toward a renewable energy-driven world is not without its challenges. Renewable energy stands as a beacon of hope in our fight against climate change, which is not just environmentally sound but economically competitive. The support for renewable energy is a global vision— a journey towards embracing international collaboration and partnerships, of ensuring a healthier generation.